Here’s Why Intel Can’t Stop Investing in Drone Companies

The world’s largest chipmaker announced this week that it invested $60 million in a Chinese drone-maker, marking its third drone investment to date.

What’s does Intel see in unmanned aerial vehicles ?

The flying machines are packed with the kinds of sophisticated chips that Intel sells and the popularity of drones makes them an attractive new market for Intel to get a foothold in as its traditional PC business continues to decline.

Processors, WiFi chips and Bluetooth chips can all be used in drones, explains Mike Hung, an analyst with research firm Gartner. Because drones are equipped with technology such as high-definition video cameras for recording, there’s also a role for powerful graphics chips, he explained.

Still, while drones are a sexy market in the emerging “Internet of Things” sector, they won’t drive significant growth for the tech company in the near future, nor will drones replace all of Intel’s lost PC revenue, Hung noted.

“The drone market isn’t going to become as large or profitable as the PC market for another decade, if ever,” Hung told Business Insider. “But it’s got good proof points: it serves large networks the way Facebook is looking at it, [it can be used for] smart farming purposes, it monitors cell towers, and there’s recreational uses like recording your kid’s softball games. While the drone market isn’t as sizeable as PC or smartphone, its tech can be used for a lot of other purposes.”

According to a CB Insights report conducted earlier in May, drones startups are in vogue: they raised a record breaking $172 million in equity financing so far this year. Commercial usage for drones has been enjoying speedy growth, compounding more than 3 times as much as military use at 19 percent between 2015 to 2020.